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Companies that were denied licenses by the Alabama Medical Cannabis Commission plan to depose six members of the commission and staff as part of the ongoing lawsuits over the licensing process, which remains stalled, making uncertain when medical marijuana products might be available.

A courtroom full of lawyers argued about the depositions during a hearing Wednesday afternoon in Montgomery. About 30 companies are involved in a consolidated lawsuit against the commission.

The state law authorizing medical marijuana in Alabama, passed in 2021, created the commission and placed limits on how many licenses it could award in certain categories of the new industry.

There are more than 30 applicants for integrated licenses, but the commission can issue only five. Integrated companies will be able to cultivate, process, transport and dispense medical cannabis.

Two companies that were denied integrated licenses, Alabama Always and Insa Alabama, asked the court to allow discovery, including the depositions and requests for written documents from the commission. Montgomery County Circuit Judge James Anderson, who has overseen the litigation since it started, granted the request. Other companies that are participants in the lawsuit support the plans to depose the commissioners.

During the previous hearing on Jan. 11, Anderson asked lawyers for all sides to meet and try to reach an agreement on the scope of that discovery. The lawyers met and gave a joint report to the judge on those discussions. Wednesday’s hearing was a follow-up to further discuss what discovery should be allowed.

During the hearing, Anderson said he believes the discovery and depositions can help him gather facts to decide whether to issue a preliminary injunction against the issuance of licenses. Anderson said Wednesday he will allow the six depositions and that they can take up to seven hours each. Anderson has another court hearing scheduled for Feb. 28.

Lawyers for the commission said the discovery process is premature because the commission has not finished its licensing decisions. The commission plans to hold investigative hearings for companies that were denied licenses.

Lawyers for the companies suing the commission said they need to know why there were denied licenses before the investigative hearings. They want to ask the commissioners why they chose the companies they did.

The commission has awarded licenses three times, in June, August, and December, but mistakes by the commission and the lawsuits have stopped the licensing process from being completed each time, putting the new industry on hold.

Previous rounds of the litigation led to a change in how the commission awarded licenses. In June and in August, the commissioners used scores assigned to the applicants by third-party evaluators.

Some companies that were denied licenses contested the use of the scores. After mediation with the companies suing the commission, the commission agreed to disregard the scores for the third round of license awards, in December. The commission adopted new rules and allowed the license applicants to make public presentations before the commission.

Now some of the companies that had been awarded licenses in June and August but were not picked during that third round of awards under the new rules are challenging the new process. They allege that the commission has violated the Alabama Administrative Procedures Act and the Alabama Open Meetings Act.

During Wednesday’s hearing, lawyers for the companies told the judge the process of deliberating on the licenses was not public.

Barry Ragsdale, a lawyer for Insa Alabama, which was awarded a license in June but passed over in August and in December, said commissioners need to explain why they made their decisions.

“Previously they had a blind scoring system that had been created to score each one of the applicants,” Ragsdale said. “They agreed to get rid of that. So at that point, it became purely arbitrary, what they decided. And we think we’re entitled to know, we think the public is entitled to know why they made the decision they made, why they gave the licenses to some people that they had previously determined to be unfit for licenses and why they denied licenses to people they had previously given them to.”

Lawyers for the commission, who oppose the depositions, told the judge that commissioners should not be required to explain the mental process that led to their decisions. They said that was protected by a deliberative process privilege.

Lawyers for the companies disputed that there is such a privilege. The commission has agreed to provide some of the written documents requested by the plaintiffs in the case.

In a previous court filing, lawyers for the commission said the litigation had become a futile cycle.

“A pattern has emerged,” they wrote. “The Commission awards a set of licenses. Unsuccessful applicants allege that the process underlying the award of licenses was illegal. The Commission then works with those unsuccessful applicants to develop and implement processes that will be deemed acceptable. Then, the complaining parties file new charges of illegality after the new processes do not result in the Commission awarding them a license. As the Court acknowledged during the December 28, 2023, hearing, this is Groundhog Day.”

Although licenses for integrated companies and for dispensaries have been blocked, the commission has issued licenses to cultivators, processors, secure transporters, and a state testing lab.

The law authorizing medical cannabis in Alabama created the commission to oversee seed-to-sale regulation of the industry, which is intended to operate fully intrastate.

The law allows companies to make gummies, tablets, capsules, tinctures, patches, oils, and other forms of medical marijuana products. Patients who receive a medical cannabis card from a doctor will be able to buy the products at licensed dispensaries.

The products can be used to treat a wide range of conditions, including chronic pain, weight loss and nausea from cancer, depression, panic disorder, epilepsy, muscle spasms caused by disease or spinal cord injuries, PTSD, and others.

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